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GE 2012 ANNUAL REPORT 89
notes to consolidated financial statements
Note 3.
Investment Securities
Substantially all of our investment securities are classified as available-for-sale. These comprise mainly investment grade debt securities
supporting obligations to annuitants, policyholders and holders of guaranteed investment contracts (GICs) in our run-off insurance opera-
tions and Trinity, investment securities at our treasury operations and investments held in our CLL business collateralized by senior secured
loans of high-quality, middle-market companies in a variety of industries. We do not have any securities classified as held-to-maturity.
2012 2011
December 31 (In millions)
Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses
Estimated
fair value
Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses
Estimated
fair value
GE
Debt
U.S. corporate $ 39 $ — $ — $ 39 $ — $ — $ — $ —
Corporate—non-U.S. 6—— 6————
Equity
Available-for-sale 26——2618——18
Trading 3—— 3————
74——7418——18
GECC
Debt
U.S. corporate 20,233 4,201 (302) 24,132 20,748 3,432 (410) 23,770
State and municipal 4,084 575 (113) 4,546 3,027 350 (143) 3,234
Residential mortgage-backed (a) 2,198 183 (119) 2,262 2,711 184 (286) 2,609
Commercial mortgage-backed 2,930 259 (95) 3,094 2,913 162 (247) 2,828
Asset-backed 5,784 31 (77) 5,738 5,102 32 (164) 4,970
Corporate—non-U.S. 2,391 150 (126) 2,415 2,414 126 (207) 2,333
Government—non-U.S. 1,617 149 (3) 1,763 2,488 129 (86) 2,531
U.S. government and federal agency 3,462 103 — 3,565 3,974 84 — 4,058
Retained interests 76 7 — 83 25 10 — 35
Equity
Available-for-sale 513 86 (3) 596 713 75 (38) 750
Trading 245 — — 245 241 — — 241
43,533 5,744 (838) 48,439 44,356 4,584 (1,581) 47,359
ELIMINATIONS (3) — — (3) (3) — — (3)
Total $43,604 $5,744 $(838) $48,510 $44,371 $4,584 $(1,581) $47,374
(a) Substantially collateralized by U.S. mortgages. Of our total RMBS portfolio at December 31, 2012, $1,441 million relates to securities issued by government-sponsored
entities and $821 million relates to securities of private label issuers. Securities issued by private label issuers are collateralized primarily by pools of individual direct
mortgage loans of financial institutions.
The fair value of investment securities increased to $48,510 million at December 31, 2012, from $47,374 million at December 31, 2011,
primarily due to the impact of lower interest rates and improved market conditions.
The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities.
2012 2011
In loss position for
Less than 12 months 12 months or more Less than 12 months 12 months or more
December 31 (In millions)
Estimated
fair value
Gross
unrealized
losses (a) Estimated
fair value
Gross
unrealized
losses (a) Estimated
fair value
Gross
unrealized
losses
Estimated
fair value
Gross
unrealized
losses
Debt
U.S. corporate $ 434 $ (7) $ 813 $(295) $1,435 $(241) $ 836 $ (169)
State and municipal 146 (2) 326 (111) 87 (1) 307 (142)
Residential mortgage-backed 98 (1) 691 (118) 219 (9) 825 (277)
Commercial mortgage-backed 37 — 979 (95) 244 (23) 1,320 (224)
Asset-backed 18 (1) 658 (76) 100 (7) 850 (157)
Corporate—non-U.S. 167 (8) 602 (118) 330 (28) 607 (179)
Government—non-U.S. 201 (1) 37 (2) 906 (5) 203 (81)
U.S. government and federal agency ————502 — — —
Retained interests 3———————
Equity 26 (3) — — 440 (38) — —
Total $1,130 $(23) $4,106 $(815) $4,263 $(352) $4,948 $(1,229)
(a) Includes gross unrealized losses at December 31, 2012 of $(157) million related to securities that had other-than-temporary impairments previously recognized.